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X Corp and former Twitter employees reached a tentative settlement over $500 million in severance claims after Elon Musk’s 2022 takeover.
A file photo of Elon Musk (AP)
Elon Musk’s social media company X Corp reached a tentative settlement with former Twitter employees who alleged they were owed $500 million (£395m) in severance pay. Lawyers for both sides informed a US appeals court that they had agreed in principle to resolve the case and asked judges to postpone a scheduled hearing while details are finalised. The financial terms of the deal were not disclosed.
Mass Layoffs At Twitter After Elon Musk’s Takeover
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The case stems from Elon Musk’s 2022 acquisition of Twitter, which he later rebranded as X. Following the takeover, Elon Musk fired about 6,000 employees in sweeping cost-cutting measures. Many of those dismissed later sued, claiming the company had reneged on severance packages. The settlement under discussion would end one of the largest of those lawsuits, though other cases are still pending in courts in California and Delaware.
The proposed class action was brought in California by two former senior staff members- Courtney McMillian, Twitter’s former “head of total rewards” responsible for employee benefits and Ronald Cooper, an operations manager.
They argued that under a 2019 severance plan, most Twitter workers were entitled to two months of base pay plus one week for every full year of service, while senior staff such as McMillian were owed six months of salary. Instead, Twitter allegedly gave workers at most one month’s severance and in many cases nothing at all.
Elon Musk vs Former X Employees
A federal judge in San Francisco dismissed the lawsuit in July 2024, prompting the employees to appeal to the 9th US Circuit Court of Appeals. Oral arguments were due to be heard in September 2024. If finalised, the deal would mark a significant step toward resolving the severance dispute, though Elon Musk and X Corp still face other legal challenges brought by former staff over mass layoffs and workplace practices.
- Location :
San Francisco, California, USA
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